LOREAL_Registration_Document_2017

Corporate governance * STATUTORY AUDITORS’ REPORTS

STATUTORY AUDITORS’ REPORTS 2.9.

STATUTORY AUDITORS' SPECIAL REPORT ON REGULATED AGREEMENTS AND COMMITMENTS WITH THIRD PARTIES (Annual General Meeting for the approval of the financial statements for the year ended December 31, 2017)

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To the Shareholders, In our capacity as Statutory Auditors of your Company, we hereby present our report on regulated agreements and commitments with third parties. It is our responsibility to report to shareholders, based on the information provided to us, on the main terms and conditions of, as well as the reasons provided for, the agreements and commitments that have been disclosed to us or that we may have identified as part of our engagement, without commenting on their relevance or substance or identifying any undisclosed agreements or commitments. Under the provisions of article R. 225-31 of the French Commercial Code ( Code de commerce ), it is the responsibility of the shareholders to determine whether the agreements and commitments are appropriate and should be approved. Where applicable, it is also our responsibility to provide shareholders with the information required by article R.225-31 of the French Commercial Code in relation to the performance during the year of agreements and commitments already approved by the Annual General Meeting. We performed the procedures that we deemed necessary in accordance with the professional standards applicable in France to such engagements. These procedures consisted in verifying that the information given to us is consistent with the underlying documents. Agreements and commitments submitted for the approval of the Annual General Meeting A. Agreements and commitments authorized during the year We were not informed of any agreements or commitments entered into during the year to be submitted for approval at the Annual General Meeting pursuant to the provisions of article L. 225-38 of the French Commercial Code. B. Agreements and commitments authorized after the year-end We were informed of the following commitment authorized after the year-end and given prior approval by the Board of Directors. Commitments made by the Company with regard to Jean-Paul Agon, Chairman and Chief Executive Officer, concerning defined-benefit pensions Pursuant to article L.225-22-1 of the French Commercial Code, as amended by the French law of August 6, 2015 for growth, activity and equality of economic opportunities, the provisions of the suspended employment contract corresponding to defined-benefit pension commitments determined for the period of exercise of the corporate office are subject to the rules set forth in article L.225-42-1 of the same Code. In accordance with the law, these provisions will apply for the first time on the re-appointment of Jean-Paul Agon as Chairman and Chief Executive Officer of the Company, which matter is to be decided by the Board of Directors immediately after the Annual General Meeting of April 17, 2018. On February 8, 2018, the Board of Directors authorized the commitments made with regard to Jean-Paul Agon providing for the implementation for the period of exercise of the renewed term of corporate office of the provisions of his employment contract, as approved by the Annual General Meeting of April 27, 2010, corresponding to defined benefit pension commitments, which are described in chapter 2 of the management report. The Board made the increase of the conditional rights over this period subject to fulfilment of the applicable performance conditions, as assessed in the light of the performance conditions of the Company. It is specified that pursuant to the provisions of the agreement to suspend the employment contract on defined benefit pension commitments and for the period of exercise of his new term of office: firstly, the calculation base of the Chairman and Chief Executive Officer’s pension will be revalued on the basis of the salaries and s contributions revaluation coefficient published by the French state pension fund ( Caisse nationale d’assurance vieillesse ), as presented in the second part of this report; and secondly, the Chairman and Chief Executive Officer will continue to accrue seniority during the renewed term of his corporate s office, up to the date on which he reaches the upper limit of 40 years of service required under the scheme, namely, on September 1, 2018. No other additional annuity will be granted to him.

REGISTRATION DOCUMENT / L'ORÉAL 2017

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